Tuesday, November 22, 2011

Nov 21: After three months and much expectation, the Joint Select Committee on Deficit Reduction (JSC, a.k.a. "Super Committee") created under the Budget Control Act of 2011 (i.e. debt ceiling legislation of last August) has announced it has failed to reach agreement on anything. The JSC was charged with devising a long-term approach to reducing the nation's deficit by at least another $1.2 trillion before this Thanksgiving. The Super Committee includes the following 12 members. Senate Democrats: Patty Murray (D-WA, Co-Chair), Max Baucus (D-MT), and John Kerry (D-MA). Senate Republicans: Jon Kyl (R-AZ); Pat Toomey (R-PA), and Rob Portman (R-OH). House Republicans: Jeb Hensarling (R-TX, Co-Chair); Dave Camp (R-MI); and Fred Upton (R-MI). House Democrats: James Clyburn (D-SC); Democratic Caucus Vice Chair Xavier Becerra (D-CA) and Budget Committee Ranking Member Chris Van Hollen (D-MD).

The Co-Chairs of the Super Committee, Representative Jeb Hensarling and Senator Patty Murray, released a brief statement saying:

"After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline. Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve. We remain hopeful that Congress can build on this committee's work and can find a way to tackle this issue in a way that works for the American people and our economy.

"We are deeply disappointed that we have been unable to come to a bipartisan deficit reduction agreement, but as we approach the uniquely American holiday of Thanksgiving, we want to express our appreciation to every member of this committee, each of whom came into the process committed to achieving a solution that has eluded many groups before us. Most importantly, we want to thank the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task.

"We would also like to thank our committee staff, in particular Staff Director Mark Prater and Deputy Staff Director Sarah Kuehl, as well as each committee member's staff for the tremendous work they contributed to this effort. We would also like to express our sincere gratitude to Dr. Douglas Elmendorf and Mr. Thomas Barthold and their teams at the Congressional Budget Office and Joint Committee on Taxation, respectively, for the technical support they provided to the committee and its members."

President Obama issued a statement in response to the Committee's failure saying:

"As you all know, last summer I signed a law that will cut nearly $1 trillion of spending over the next 10 years. Part of that law also required Congress to reduce the deficit by an additional $1.2 trillion by the end of this year. In September, I sent them a detailed plan that would have gone above and beyond that goal. It's a plan that would reduce the deficit by an additional $3 trillion, by cutting spending, slowing the growth of Medicare and Medicaid, and asking the wealthiest Americans to pay their fair share. . .

"But despite the broad agreement that exists for such an approach, there's still too many Republicans in Congress who have refused to listen to the voices of reason and compromise that are coming from outside of Washington. They continue to insist on protecting $100 billion worth of tax cuts for the wealthiest 2 percent of Americans at any cost, even if it means reducing the deficit with deep cuts to things like education and medical research. Even if it means deep cuts in Medicare. So at this point, at least, they simply will not budge from that negotiating position. And so far, that refusal continues to be the main stumbling block that has prevented Congress from reaching an agreement to further reduce our deficit.

"Now, we are not in the same situation that we were -- that we were in in August. There is no imminent threat to us defaulting on the debt that we owe. There are already $1 trillion worth of spending cuts that are locked in. And part of the law that I signed this summer stated that if Congress could not reach an agreement on the deficit, there would be another $1.2 trillion of automatic cuts in 2013 - divided equally between domestic spending and defense spending. One way or another, we will be trimming the deficit by a total of at least $2.2 trillion over the next 10 years. . .

Already, some in Congress are trying to undo these automatic spending cuts. My message to them is simple: No. I will veto any effort to get rid of those automatic spending cuts to domestic and defense spending. There will be no easy off ramps on this one. We need to keep the pressure up to compromise -- not turn off the pressure. . . The only way these spending cuts will not take place is if Congress gets back to work and agrees on a balanced plan to reduce the deficit by at least $1.2 trillion. . .

Now, in the meantime, we've got a lot of work left to do this year. Before Congress leaves next month, we have to work together to cut taxes for workers and small business owners all across America. If we don't act, taxes will go up for every single American, starting next year. And I'm not about to let that happen. Middle-class Americans can't afford to lose $1,000 next year because Congress won't act. And I can only hope that members of Congress who've been fighting so hard to protect tax breaks for the wealthy will fight just as hard to protect tax breaks for small business owners and middle-class families. We still need to put construction workers back on the job rebuilding our roads and our bridges. We still need to put our teachers back in the classroom educating our kids. . ."

National Association of Manufacturers (NAM) President and CEO Jay Timmons issued a statement saying, "The Committee's failure to reach an agreement on deficit reduction is at best a missed opportunity to put our fiscal house in order and represents a serious step back from the goal of creating a pro-growth environment that fosters job creation and investment. Manufacturers continue to be negatively affected by the rising debt crisis and its accompanying uncertainty and shaken consumer confidence. We are extremely disappointed that the Committee did not take advantage of the opportunity to restore confidence and stability to our economy by reforming entitlement programs and creating a tax code that promotes investment, growth and jobs.

"Moving forward, it is imperative that Congress act to stop the automatic, significant cuts to defense spending. Cuts in defense spending will have a massive ripple effect throughout the entire manufacturing economy, affecting large defense contractors, tens of thousands of small and medium-sized manufacturers in the defense supply chains and over 1 million workers -- a result we can ill-afford in a struggling economy and a period of such global unrest." The NAM's Defense Manufacturing Working Group issued a report on the true impact of defense cuts and job losses.